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First Business

News/Business. Angie Miles. (2012) New. (CC) (Stereo)

NETWORK
FOX

DURATION
00:30:00

RATING
G

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 93 (639 MHz)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

U.s. 4, Us 4, At&t 3, Darden 2, Diane Swonk 2, Advanced Digital Network 2, S&p 2, Alan Knuckman 2, Scott Bauer 2, Europe 2, Swonk 2, Washington 2, Chuck Coppola 1, Ford 1, Fdic 1, Technomic 1, Katherine Heigl 1, Bill Moller 1, Larry Shover 1, Elizabeth Warren 1,
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  FOX    First Business    News/Business. Angie Miles.  
    (2012) New. (CC) (Stereo)  

    December 5, 2012
    4:00 - 4:30am PST  

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after ringing in the new year. the sudden flow of one hundred dollar bills is indicating a rise in fishy activity. and, bring on the breakout. are the markets poised for a swing to the upside? first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wednesday, december 5th. i'm angela miles. in today's first look: standstill. that's what's happening with the budget talks in washington, and it's reflected on wall street. stocks barely budged yesterday. gold, however, was a major mover. what that tells traders is coming up in the show. pandora hit a sour note with investors last night. shares plunged after the company revealed a loss of advertising money as lawmakers fail to find harmony over averting the fiscal cliff. the brand new dreamliner is under review after making an emergency landing in new
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orleans due to a mechanical glitch. larry shover of sfg alternatives joins us now on this wednesday for an early look at the market. what is going on with volume? is the market in a bit of a holding pattern here? > > yeah, the market is completely in a holding pattern right now. i think what i just saw yesterday, volumes are down about 10% on the 3-month average. but let's keep in mind that all eyes are on the fiscal cliff right now. we are at the end of the year, there's a lot of performance anxiety going on right now. so people are either locking in profits or not initiating new trades. > what is driving down the dollar? > > right now what is driving down the dollar is a lack of confidence in the united states government. that's plain and simple right now. are we going to lose our safehaven status? i doubt it right now. but in the short term, people are worried that this thing is not going to get figured out, and taking their money elsewhere.
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> what are some of the best sectors and the worst sectors you see? > > i look at it two ways. right now, i would look at financials and materials over energy and utilities, simply because the tailwind in the housing recovery that we are going to continue to see in 2013 will directly benefit both financials and materials. we have already seen a big run-up in energy and utilities. they have probably seen the better part of earnings over the last couple of years. > were you impressed by toll bros. earnings yesterday? > > i really was. i think it's just more that's going to continue. i think we as a nation, we as investors, underestimate the tailwind that the housing recovery is going to supply, and toll brothers is the prime example. > larry, thanks for coming on the show. have a good day. the largest shipping port in the nation that has been shut down by a strike for days could be closer to re-opening. union workers and ship-owners are meeting with a federal mediator. the walkout by 800 office clerical workers started november 27th against shipping lines and terminal owners. the office workers have been without a contract since june of 2010. they were joined on the picket lines in l.a. and long beach by dockworkers and truckers, bringing business to
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a standstill at those ports. shipping companies say the employees have been offered job security, along with generous wage and pension increases. workers contend their jobs are being shipped overseas. "we're not asking for money, we are asking for jobs, and most peopls are saying you are being greedy. no, that's not the whole point." the mayor of l.a. says the strike is costing the local economy billions of dollars per week. avoiding the fiscal cliff is coming down to taxes. president obama told bloomberg tv yesterday he is willing to be flexible, but there will be no deal unless republicans agree to raise income tax rates on the top 2% of wage earners in america. this week the gop offered a proposal that continues tax breaks for everyone while making cuts to medicare and social security. the president and democrats say the lack of a tax hike on the wealthy is leaving budget talks at an impasse.
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"60% of americans support asking millionaires to pay slightly more. many republicans feel the same way. the only ones who feel differently are the ones who work in this building. we can't let these negotiations be dictated by the tea party." "we've wasted an enormous amount of time here sparring back and forth in public, and it strikes me it's a good time to get serious about the proposals. traders are keying off market moves for clues about the economy. scott bauer of trading advantage joins us now. scott, what is the gold market telling traders about the prosepects of the economy going over the fiscal cliff? > > angie, it has been a very interesting trade in this space recently. people look to gold as the safe haven, yet we have seen gold prices come off about 5% over the last couple months. and in fact, yesterday was just touching a major support area, both psychologically and technically, right around that
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$1,700-an-ounce level. now, you would think that if the gold market, or people trading gold, were really that concerned about the fiscal cliff, that would be the safehaven, and we wouldn't see this major sell- off. but, we are seeing that, and actually if we break through this $1,700 level, the next major area of support is down about another 5%, around $1,620. > so the fact that people are not rushing to gold tells you that there is a chance that maybe things will be ok. > > exactly. > good to have you on the show. that's scott bauer of trading advantage. > > thanks angie. newly-elected massachusettes senator elizabeth warren will reportedly take a seat on the senate banking committee. the huffington post reports warren has been selected to join the committee starting next year. warren, a major advocate of wall street regulation and cracking down on big banks, won the race for senator in massachusettes in the november election. she also helped launch the consumer financial protection bureau in 2010. two seats will be open on the banking committee after the year wraps up. 2012 is turning into a very profitable year for banks. the latest numbers show bank profits increased 9.4% in the 3rd quarter - the most in any quarter during the past 6 years. fdic reports the industry earned $37.6 billion, up 6.6% from last year. loan balances
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edged up .9% to $64 billion. the improving numbers are viewed as a sign banks are gaining strenghth and lending is showing signs of life. after the craziness of black friday, or more accurately what is becoming a "black weekend" of shopping following thanksgiving, retailers face a lull. trying to keep consumers coming through the doors, retailers including banana republic, j.c. penney and neiman marcus are offering additional promotions. shopping momentum traditionally slows between black friday and the final days before christmas. restaurant owners are taking a financial hit by threatening to cut jobs and working hours as a way to deal with the new healthcare law. darden restaurant group, owner of the olive garden and red lobster, just cut its profit forecast for the year, specifically citing failed promotions and the pr problem it encountered after admitting to limiting employee hours. under the affordable
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care act, companies with more than 50-full time employees are required to offer basic health coverage for workers or face a fine. other restaurant chains have also generated backlash after publicly complaining about obamacare. "i think the point is that the restaurant industry shouldn't expect to be able to have this advantageous position relative to many other industries that employ a lot of people and do pay healthcare benefits. and, quite frankly, it is the law, so we'll all have to deal with it and manage through it. that was restaurant consultant bob goldin of technomic. darden shares were down 10% yesterday. the founder of software company autonomy is on the defense. this week, autonomy founder mike lynch launched a website addressing allegations of accounting fraud by hewlett- packard. hewllet recently accused autonomy executives of inflating revenues prior to hp aqcuring the company last year.
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a statement on the website reads "the former management team of autonomy strongly rejects the accusations made by h-p." general motors is putting the brakes on the production of some cars and trucks. according to the wall street journal, the automaker has an overload of unsold cars and trucks. over the holidays, gm plans a 3-week shutdown at its lordstown, ohio, plant, where the chevy cruze is built. shutdowns may happen at another factory as well. meanwhile, ford is increasing production by 11% next year. disney fans will soon have new choices to add to their netflix queue. disney plans to sell the rights to some of its new movies to netflix. starting next year, netflix users will be able to watch disney releases at home shortly after the movies hit theaters. netflix stock surged 8% on the news. meanwhile, there's a surge in c- notes. the 100-dollar bill is considered the preferred method of payment for drug deals, arms sales and tax evasion transactions. as a result, the u.s., government is printing 100% more 100-dollar bills. 3
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billion 100-dollar bills were printed last year. that's 50% more than $1 bills. champagne sales are going flat in europe. so far this year, champagne shipments from popular french regions have dropped 5%. while many blame the euro crisis, cold weather and rain have damaged this year's crop of grapes needed to produce the festive beverage. however, while sales are down in europe, demand from the u.s. has remained steady. champagn sales are expected to bubble up for year-end celebrations. forbes is out with its annual list of overpaid actors. eddie murphy plays high this year, coming in at number one. according to forbes, the actor has had a string of flops following the blockbuster shrek movies. forbes estimates for every dollar murphy is paid, the return on average for his last 3 films is $2.30.katherine heigl logs second with a return of $3.40. reese witherspoon is third at $3.90. sandra bullock
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at 4th with $5, and jack black rounds out the list at $5.20. still to come, how friction in washington is chipping away at the economy. chuck coppola has a report. but first, places to park your money in 2013 is next, with bill moller.
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in the eyes of the world, the u.s. is poised to become laggards instead of leaders if congress and the president fail to resolve the fiscal crisis beyond any short-term fix. in our cover story, that's how diane swonk, sr. economist at miserow financial, described the participants who, as swonk put it, "have not done what they need to do." diane swonk, sr. economist at mesirow financial, expects the u.s. economy will face a $200 billion fiscal drag next year, the effect of a negotiated deal that includes resuming the 6% payroll tax, limiting unemployment extensions and discretionary cuts. according to swonk, it's about far more than reforming tax rates. "the real issue is spending. baby boomers are getting older and we have to address that. yet all the talk is on the tax side of the equation." but swonk admits the current tax code that allows income from investment, as in mitt romney's 15% tax bill two years
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ago, needs fixing. "someone who's making a gazillion dollars should not get carried interest taxes. that's just wrong." the markets have been skeptical that a long-term deal will be made. equity analysts are not optimistic. "we're expecting more volatility in the first half of 2013. we expect we'll be hearing debt ceiling discussions again." for now, fiscal cliff negotiations have slowed activity. "this is where the market is frustrated by politics. it's a vicious circle." even at a meeting of start-ups, a group some consider below the radar of fiscal cliff negotiations, some entrepreneurs are becoming unusually cautious. "you have to take pause and assess what healthcare and taxes may cost, but we also have an obligation to our investors,
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so we see the fiscal cliff thing as a temporary roadblock but not something that...it won't stop us from hiring at this moment." one bright spot - according to analysts at mesirow, housing, expecially new housing, in many markets is being driven by investors purchasing homes. another indicator - remodeling. people are putting money into their homes more now. carpeting, appliances, and contract work all spreads the wealth. thank you chuck. still ahead, stocks that make the "must own" list for 2013, right after the break. here is a question a lot of people are asking themselves this time of year - how's your equity portfolio looking? little anxious about making a move? the people at zacks investment research are looking ahead through 2013 to see where the opportunities might lie. let's talk with john blank. he is the chief equity strategist, the big-picture guy. so, let's talk generalities. bulls or bears, who will be doing most of the running in 2013? > > in my camp, i am a bull, and w i think we can get a 10%
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return out of next year. > very good. how about through the year? will it start out
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looking a little weak and we will find our stride in later quarters? > > that is mercury to me. i think you are probably likely to see a january effect and have pop, which is traditional. and i expect through april or may you might see the bulk of the run, and then it will taper off. > focus on some sectors. a lot of people are saying health care is going to continue to be robust. how do you see it? > > i am actually bullish on global sectors. i think we are going to see an asia-pacific-, china-driven market that we haven't seen in five years. and i see i.t., which is beaten down right now, but i would take a position in. i see industrials, which have good global exposure as a stock area that would put some money toward. and i think materials, the big material companies that have been beaten
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down by the china slowdown, are coming back. > a lot of people, i have been reading on the emerging market, they are saying if you don't have positions in emerging- market companies, you are going to be missing the boat, because a lot of upward growth potential lies there. > > it is true, but i would say that there is also emerging market debt, corporate debt, in companies like this, or sovereign debt in emerging markets is another place to look. i think there's a lot of tools to put money to work in the emerging markets, and i think people should use all of them. > what kind of balance do you think for a diversified portfolio should people be considering in this mix of different kinds of sectors? > > they certainly should just
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be bullish equities going forward. we have zero return in stocks, we have a treasury rate which is benchmarking all of the interest rates at 1.7%, which really means it's basically not going to go down, which means prices on bonds are likely to fall. so, you have to stay in a risk position, which means equities or equity-like instruments for the next few weeks, few months. > don't be a cowboy. be cautious. > > be cautious, but also understand caution means taking risk, not not taking risks. > john blank from zacks investment research. thanks so much. > > thank you. coming up, why you might not want to wait too long to stock up. chart talk is next.
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alan knuckman of option shop joins us now for chart talk. good to have you on the show this morning. alan, what do you see in the chart? are we headed for a big break-out or a big breakdown? > > i am very, very encouraged by the chart action. this is about the price action, what the charts are telling us. if you can ignore the catastrophes or the crises that we have had over the past two years, the charts have been very, very
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positive. the recent lows we saw, this extreme low where the stock market sold down 9%, we have seen an amazing bounceback and then follow-through last week that i am very encouraged by. if we can get back above the 1425 pivot from august, they really can set this market on fire one more time. > historically, have you seen anything else like this alan? > > again, the market is focusing on issues, and we have moved past it. if you think about the debt ceiling crisis last year, we moved past it and made new relative highs. so it has been one hurdle after another that we have overcome. and if you look at the long-term charts, look at a 15-year chart, we have done this now, this will be the second time in the s&p. and if we get back to these recent highs at 1470, and we add the distance of the hole that we dug ourselves on top of that, we target 1600 in the s&p, which is about 13% above where we are right now. but 1600 for the high in 2000 and the high in 2007, so we are having a complete v-shaped recovery, which is a perfect chart pattern. > that was my next question: when you see this in the charts, what does it mean for the economy?
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> > obviously the economy will continue to show strength, and we have seen increased corporate profits and performance over the past couple years. a good example right now is, even with this ensuing issue hanging over our heads, the markets remain strong and have revitalized themselves and bounced back. and one problem we are seeing in the stock market right now that is not a problem, is companies have so much cash that they are trying to spin it off before tax implications change in 2013. > will you be buying more stock based on what you see in the charts? > > i am looking in long-term for the continued asset appreciation, and i like the stock market here. if we can maintain this 1400 level on a weekly basis, i think we are going to make an attempt on those recent highs at 1470, and over the course of the next year, i am looking at 1600 as a target. > 1600. so is it better to buy the index or buy individual stocks? > > i think the index gives you better coverage. obviously you can get a better payoff if you are correct with the right stocks, but you don't have the diversification. so i think a lot of times you are safer to
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go with the index. it is hard to beat the index over a long period of time, as everyone here all knows. > good to have you on the show. that is alan knuckman of option shop. that's a wrap for today. coming up tomorrow, it's movies and money. why a hot hollywood celebrity is running into trouble at the box office. from all of us at first business, thank you for wathcing. a man on a bike gunned down in berkeley overnight.
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how police officers were alerted to the victim. and four people injured in a shooting near oakland's lake merritt. some very light rain coming through. we'll talk about what looks to be totals but the rain is there. time for the ktvu channel 2 morning news. good morning. thank you for joining us here on this wednesday morning december 5th i'm pam cook. >> good morning, i'm brian flores. a little it will of lightering this morning. steve is joining us. >> you hit the nail on the head. very light rain. this is nothing compared to last week. very light rain. most locations say cloudy or drizzle. still you have to deal with morning rain. you can see a little bit of that. taking in toward the san mateo coast. get a good look at that. it is starting to